For many electronics companies, outsourcing certain aspects of the logistics process can lead to better business and improved customer support. By working with the right third party logistics (3PL or 4PL) companies, these manufacturers can stand out from the competition by offering new and better services.
3PL or 4PL companies provide a variety of services: warehousing, distribution, transportation, and sometimes even value added services, assembly services, packing services and more. Their core customer is one who would rather focus only on their product and core competency and do not want to worry about other aspects of running a successful business.
Of course, there are some clear differences between 3PL and 4PL offerings. To put it succinctly, 4PL companies own the end-to-end supply chain. These companies offer extra value added services that not every 3PL vendor offers. 4PLs also pro-actively offer additional help with monitoring the entire supply chain, looking for opportunities to optimize the supply chain and provide additional value added services that 3PLs won't offer.
Often both 3PL/4PL vendors are operating on thin margins due to competitive pressures, the nature of the products they carry, and the nature of the industry they serve. For example, the most challenging business is to be a 3PL that carries food products because not only the margins are insanely thin but any delay in addressing any exception or even a small mistake in timing (due to lack of visibility in the supply chain) could potentially result in the food product getting past the expiry date and not be sellable to the end customer.
This competitive landscape can create holes in the services that logistics partners may offer. For example, to stay competitive, 3PL/4PL companies tend to buy every infrastructure possible at the lowest cost possible. Often, they end up buying refurbished scan guns and other refurbished hardware to save cost. This practice of price based procurement practice that they are blind to the potential cost of the practice. Let's take a look, for example, how refurbished RF guns compare to the newest wearable/tablet technology currently available in the market:
Clearly, wearable and tablet devices offer some clear benefits in terms of both cost effectiveness and capabilities to 3PL/4PL providers. Now, let's look at some of the ways that these technologies can create a clear differentiation from the competition and offer exponential gains to the business. By deploying a technology that gives wearable devices to operators, tablets for supervisors, and bring your own device (BYOD) apps for personnel that carry their own devices, 3PL or a 4PL vendor claim a number of benefits: